Tuesday, 30 June 2015

“Trust and Transparency are Essential for the Success of Your Business” ―Professor M.S.Rao









“No ruler can establish himself without trust from the people.” ―Confucius


When you look at the collapse of global companies such as Enron, Leyman Brothers, Tyco and other companies, it is obvious that there is a steep decline in ethical values.  People are losing trust on leaders gradually.  Opinion polls blame that the challenge is acute and it is tough to reverse the trend to build trust.  Some people blame business schools.  Hence, let us discuss about trust and transparency to achieve organizational excellence and effectiveness in this post.  

There are several elements of trust such as competence, commitment, communication, credibility, reliability and integrity. When leaders combine these elements and walk their talk, they can build trust in various stakeholders.   

When leaders cut corners, they lose trust in the stakeholders. When leaders are selfish and gain at the cost of others, they lose trust. When leaders emphasize on ends rather than on means, they lost trust. There are leaders who were beset with scandals and finally hit their rock bottom. However, there are a few leaders who realized their mistakes and worked hard, won trust and confidence from others. For instance, Jimmy Carter left the presidency after one term with a somewhat tainted image. The economy was in a shambles, rescue efforts for kidnapped hostages had failed, and confidence in his judgment was very low. However, over subsequent years, with dedicated work through Habitat for Humanity, peacemaking, and service, he was able to resuscitate his image and create a new brand as a Good Samaritan, peacemaker, and diplomat. In another shift, Bill Gates founded Microsoft and became known for his aggressiveness and business competitiveness. But when he donated a great deal of his personal fortune and his time to philanthropy, he began to change his cutthroat image to one of concern and compassion.  However, they are exceptional cases. Here is a story of Mark who struggled hard to rebuild trust in lenders.


A Short Story on Rebuilding Trust

Mark did a wholesale trading business and was bankrupt as some of his customers took goods on credit from him and did not pay him the money. He filed cases in court but ineffective.  Lenders began chasing him as he took loans from others. Unable to bear the pressure from his lenders, he absconded with his family to unknown location for safety. After a few years, he visited the previous place of his business to settle the debts.  He still had to pay the debts to some of the lenders. Mark informed them that he would come back next time and pay the remaining debts. But the lenders did not trust as he absconded once. With the help of guarantors he came back to the place of his existing business, raised a few loans and paid back the money to the rest of the lenders.  He stood by his commitment and proved that he would not make the same mistake again.  Takeaway from this story is once trust is broken it is tough to build it. Hence, everyone must ensure that they honor their commitment to build trust in others.

Leaders are always under scanner. People often look at negative aspects rather than positive aspects. Hence, leaders must be careful in their personal and professional lives. It is easy to fall from the top of the tree but it is very tough to climb the tree. Similarly, it is easy to earn bad name but it is very tough to earn good name.  Warren Buffett once said: “It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do thing differently.”


Conclusion

Trust and transparency are essential to success of businesses. Hence, always emphasize on values and principles to accomplish your goals. Remember, we carry either good or bad reputation after our death. Why shouldn’t we carry good reputation to leave a mark behind for others to follow?


“To be trusted is a greater compliment than to be loved.” —George MacDonald


Note: It is based on my upcoming authored book tentatively titled, 21 Success Sutras for CEOs: How Global CEOs Overcome Leadership Challenges in Turbulent Times to Build Good to Great Organizations.


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Life is great!

Professor M.S.Rao, India
Founder of MSR Leadership Consultants India
Listed in Marquis Who's Who in the World in 2013
Vision 2030 Webinar: https://www.youtube.com/watch?v=nBCO-gWmTRk
Twitter: @professormsrao  
21 Success Sutras for Leaders: Top 10 Leadership Books of the Year (San Diego University) Amazon URL: http://www.amazon.com/21-Success-Sutras-Leaders-ebook/dp/B00AK98ELI




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